Saudi Arabia's Oil Wealth Is About to Get a Reality Check
bloomberg.com
bloomberg.com
Even princes born with black gold will sooner or later be surpassed by organizations run by inventors, scientists, and engineers. The values and abundance generated by hi-tech services are increasing while traditional energy sources are being supplanted by renewables.
“The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil.” -- Sheikh Zaki Yamani, a former Saudi oil minister.
Besides, the world could become a better place the day the wahhabism oil-funding fades and vanishes.
With global warming, these are the two most serious threats coming out of our oil-dependent economy.
Instability and collapse in Saudi Arabia or the wider Arab world would be good for nobody, even if it's inevitable. Lack of oil funds isn't going to make Wahabism go away or reduce the threat it poses, in fact IMHO quite the opposite. A triumphal raised finger in that direction is likely to get bitten off.
A puppet state implies that some other state is pulling the strings. Saudi Arabia is controlled by the House of Saud no?
I don't think "puppet state" is an accurate description, but their fate is heavily dependent on our mutual relationship.
It's as clear as it gets. The United States guarantees the House of Saud'a rule in exchange for military and regional policy concessions.
If the KSA quits, America can pull its security guarantee and the regime falls. If the United States quits, the KSA can...sell Treausries and stop selling us oil?
The United States was 61% energy independent in 2013, with net energy imports falling [1]. We also import lots of oil from Mexico and Canada. The energy threat isn't existentially potent.
Regarding Treasuries, the accounts could be frozen and sanctions levied. Again, power is asymmetric.
[1] https://en.m.wikipedia.org/wiki/United_States_energy_indepen...
Well, that's a pretty shitty outcome for the US, so the KSA has a ton of leverage here and they know it.
> The United States was 61% energy independent in 2013, with net energy imports falling...
Yes, and this might be one of the reasons that Saudi oil prices were pushed down. Shale oil and fracking was becoming a problem and they moved to correct that. This also took care of the Canada problem as well, setting back development by another decade.
Don't forget the oil market is world-wide. The US could be self-sufficient but if oil is crazy expensive because Saudi Arabia is on fire that will wreck the economy.
No, they don't. It's an existential question versus inconvenience. Trashing the KSA could be spun as a national security or human rights decision.
> the oil market is world-wide
Trashing the KSA would be expensive, but not catastrophic. Rising oil prices would help American exporters. Furthermore, we have laws on our books to ban the export of crude; WTI could be low while Brent soars.
My fundamental point is that American influence over the Saudis shadows any Saudi influence on America.
US policy is set by politicians, bureaucrats, and military leaders. And STC has them well into its palm. That's why the STC can attack us on our own soil, kill thousands of us, and get thanked and rewarded by our leaders.
Interest rates are stupidly low now, borrowing trillions has never been easier. If they get as high as they did in the 1980s there will be blood in the streets.
Every nation state stockpiles pallets of $100 bills as a result. Cut that requirement and allow purchases in Euro, Rmb, etc and the people start unloading dollars.
Compare that with the Euro, which has France threatening to withdraw, and the Renmimbi, which Chinese will sell at fire sale prices for access to international markets their government prohibits them from accessing.
Petrodollars once played a role, but no more. Frankly, it seems like an unnecessary liability held over from when the American economy was dependent on foreign oil.
I've uncovered some interesting references on the UK monetary crisis of the 1970s -- the UK required an IMF bailout, though revenues from North Sea oil sales helped considerably as well.
There is a bit of similar discussion about US monetary policy from the early 1970s, and I've a stash of J. Econ Rev. or similar articles from economics conferences of about that time which touch on the question, though I'm not sure the information's good.
Steve Keen has good insights in a few areas, as does David Graeber. I've got Keen's book handy, and will take a look through it.
Otherwise, there's the story of devaluations of other currencies throughout history. Joseph Tainter, whom I've mentioned elsewhere in this thread, has a long bit online (YouTube) on the devaluation of the Roman denarius -- specie coin which fell from 99.9% purity to less than 4%. Adam Smith talks of the inevitable debasement of coin in Wealth of Nations. And Robert Newman (a comedian, not an economist, though his work here is excellent) touches on petrodollars and sensitivity regarding them in his History of Oil: https://m.youtube.com/watch?v=GIpm_8v80hw At 21m30s.
Hrm. Nothing in Keen on "petrodollar" or "Bretton Woods", and only a brief, 1929 reference, to the gold standard.
I'd suggest looking up J.K. Galbraith or Philip Mirowski as possible sources, though I'm not aware of anything specific to either of them. Highly-regarded and unorthodox economists.
They made a deal way back that the US would keep House of Saud in power, in exchange for their Oil at market prices. That - and the fact that they are allies on 'terrorism' means a degree of mutually beneficial transactions.
Strategic partners, that's it.
The US does things that massively piss of the Saudis - particularly the removal of Iran sanctions. That is pretty much #1 worst thing that the US could do, outside of withdrawing support for them unilaterally.
It's a very important deal considering how much Oil they have, and that they could chose to use it as a geostratgic weapon - but really, if the US did not protect them they would have been invaded long ago.
It's not so apparent in 2016, but it was more important way back.
Saudi Oil is sweet, and very easy to access with old-school technology. Nowadays you have off-shore, deep-water, Oil Sands, horizontal drilling etc. etc. that didn't exist.
So may be it's more about protecting the interests of American Oil companies rather than direct consumption.
I think you put the quotation marks in the wrong place. The Saudi government are "allies" with the US on terrorism - that is, they nominally support the US efforts to combat terrorism, which means that the US overlooks Saudi-originating terrorism and instead directs its attention elsewhere.
Our military needs their money to create and sustain critical jobs here and buy billions worth of military tools most of which they barely know how to use.
You're thinking of Israel.
The US relies on Saudi oil.
Saudi Arabia relies on US protection.
Each benefit mutually from petrodollar pricing -- the US guards against devaluing its currency (and reducing the value of dollar-denominated assets within its financial system), Saudi Arabia, and virtually every oil-exporting nation, benefits by not having their currencies appreciate in the absence of any meaningful domestic demand for foreign goods.
There are other elements, though those are the large ones.
Actually the US does not need Saudi oil. Yes, we do import from them, but we can easily replace them. We get almost 4x as much oil from Canada as we do from Saudi Arabia, by the way.
So, while the US may not burn Saudi oil directly, it is absolutely dependent economically on Saudi Arabia supplying a critical share of global oil.
More significantly, as the global surplus producer, Saudi Arabia took over the role the US had played from 1930 - 1971 in setting and establishing global oil prices. The result hasn't been quite so, ahem, well-oiled as the TRO's production quota and certificates of clearance (US Dept. of Interior), but it's been the one handle on extraction volumes, and hence, price, that's been available.
The other thing is that while the US isn't necessarily dependent on Saudi oil, key allies and trading partners are. Places like Japan, China, EU states, etc. That gives them a lot of strategic leverage.
https://www.washingtonpost.com/news/worldviews/wp/2016/04/05...
Also they are largely running their own war in Yemen against the Houthis. And it the Saudis that are flying those sorties.
http://www.independent.co.uk/news/uk/politics/uk-has-sold-56...
Things like additional human stampedes during the Hajj have the potential to end Saudi rule far faster than any relaxation of US support, or even attacks from powerful neighbors.
http://energydesk.greenpeace.org/2016/01/15/data-how-guns-an...
I never hear a convincing answer to a question: what should US have done instead? Stop supporting House of Saud and let their internal enemies, as radical as ISIS, take power instead, turning the country into another Syria?
Yes, supporting bad guys feels bad - but you have to consider the alternative.
Consider: We live on a ball of molten iron. Dig a deep enough hole and you get a nearly unlimited supply of thermal energy.
In that way it's very similar to oil.. no one has to pay to create the energy contained in oil, but they do have to pay to dig it up and distribute it. And yet, oil is not even close to being free.
Edit: a better comparison would probably be hydro.. which also isnt free.
Iceland uses geothermal. They have it easy due to geological circumstances, but that's mostly a cost-saving measure. Any country can do the same.
There's also geothermal systems for homes that cost far less that work by tapping the temperature differential in the ground: https://www.thisoldhouse.com/ideas/geothermal-heat-pump-how-...
Oil is expensive because it's a scarce resource that requires a lot of effort to extract, process and transport.
A geothermal system for your house involves "transporting energy to your home" but the distances involved are so minimal that once installed it's next to nothing.
> Since placing your home next to a large temperature differential is difficult...
Well, that's wrong. Every house sits on top of a significant temperature differential which is why geothermal systems work. In large parts of the continental US the ground deep beneath the house maintains a consistent temperature year round. This can be used as a thermal sink in the summer, and a source of heat in the winter.
That being said, until we have highly optimized how we utilize that unlimited source, it will remain a scarce resource.
Early books (1860s to 1880s) on oil, gas, and coal noteed that tthe United States' coal reserves were good for one millon years, _at then-present rates of consumption._
The rates increased. A few centuries, tops, now.
British coal extraction peaked in the early 20th century.
UCSD physicist Tom Murphy extrapolates human acttivitty to galactic-sscale energy conssumption in fairly short time.
http://physics.ucsd.edu/do-the-math/2011/07/galactic-scale-e...
If we're talking about some theoretical far-off future, then I posit that prices should be constrained by the conservation laws of physics coupled with the distribution of conserved quantities in the universe. Greater technical ingenuity may get you more redness or more temperature or more velocity, but it will never get you more mass-energy, more momentum, or more charge.
So what do you use this energy for? Probably want to know more. Energy is necessary for computation but that's pretty much all what universe is - energy and mass. If you know the process of harvesting it (technology = information) then it's not like you need to do some work. The idea of doing some physical work to get something done is getting deprecated. Once you know exactly how to do something, you can set it up. Information becomes results.
So what if there are others that also want to have access to the energy and mass available in the universe, some kind star wars scenario? Technological progress destroys raw power, so it's about who can develop faster. Progress is done through computation. For computation we need algorithm (=information) and energy. Amount of energy influences speed of computation linearly. I'm making an assumption that with algorithm improvements you can do better, much better.
dredmorbius@gmail.com if you don't care to share publicly.
"My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel," the Sheikh was fond of saying.
Be careful to not reproduce in excess. This is the main thing. You don't want wealth to divide too rapidly between quick generations. Ensure you invest heavily in training people to teach them how to grow their wealth through age old tested ways: Gold, Real estate, well trained children. Ensure your accumulation rate is above your spending rate.
Modern day trusts too come to mind. Kennedy's, Clinton's, Rockefeller's and Rothschild's of the world.
Wealth doesn't last for long if you don't have the discipline for it. Most people who tend to lose wealth are generally the ones who completely lose a grip on reality. Deviate so far away from the very reasons that bought them there. Bad things happen from there on.
Or, alternatively, reproduce abundantly and use your children to make alliances with families that actually do matter.
You're advocating having few children in a thread related to Saudi Arabia, a kingdom whose founder had 20+ wives and some 100 children. That is how all the warring clans in the Arabian Peninsula were united and pacified: by marriage.
An inheritance split between 100 children, and then split again between their children a generation later is going to run out pretty quickly.
Even if it's only 4-5 children per person it will run out within a few generations.
Also, why should all children inherit equally? Marry the daughters into wealth, and make sure only capable sons inherit.
In an ideal world, that's a great idea. In reality, see above about camels, Mercedes and Lamborghinis.
You can reproduce in excess, but you have to practice primogeniture.
>70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third, according to the Williams Group wealth consultancy.
>It takes the average recipient of an inheritance 19 days until they buy a new car
The beloved leaders have reached the third generation: that could represent some hope to North Korea inhabitants.
Otherwise, every person is insincere, including both yourself and I.
Side anecdote: While I haven't met and talked with the guy in person, I know a person who has. Her impressions of him was that he was an honest man who cared about his country.
Take what people say with a grain of salt unless there is reliable source that backs them up.
If Dubai's elite's descendants will be riding camels some decades from now, then why does Dubai have a national wealth fund?
The truth is that Dubai's wealth fund may invest in YC or in VC funds, and some of those mocking Dubai's future will be working indirectly for the elites that run Dubai. To distract people from such master-slave reality, a bit of self-deprecation can be charming.
My point is, these things can change. Quickly.
Gulf Oil was discovered in the 1930s. The current major oil-producing regions: Russia, the United States, Saudi Arabia, and Venezuela, were all majors then.
See Daniel Yergin's The Prize, or Manfred Weissenbacher's Sources of Power.
(Which is to say: I'm agreeing with your point and extending it.)
Demand for oil will peak just before then, according to Royal Dutch Shell Plc projections, as alternative fuels and electric cars gain popularity, putting Middle East energy producers on shakier footing.
The minute Tesla and others get electric vehicles to have sufficient range and low enough costs, we're going to see demand for oil go into structural decline. (https://news.ycombinator.com/item?id=13039490)
Plastic, commercial oil use, energy production, cosmetics, etc.
Oil has many uses beyond powering cars.
(Meaning less than 8% of all American petroleum consumption, given the other poster's 70% figure.)
http://www.airbusgroup.com/int/en/corporate-social-responsib...
Early days yet, of course, but the groundwork is underway.
Same for Europe.
EU + US are about 1 Billion of 7.5 Billion people on the planet, many of whom don't have cars, but are about to be able to afford them ...
It occurred to me driving home today that if Elon screws up and suddenly all of the Supercharger stations go away at once, its going to really put a pinch on owning an electric car. And yet, if he can get to the point where others are building super charger stations because they can make some money at it, then the market flips to electric cars by default.
Furthermore, the demand for plastics and hydrocarbons for other uses will only increase with global income levels rising.
I think, if EV prices keep falling like they have been, developing nations may skip ICE cars and jump straight to EVs (similar to how many nations 'skipped' landline phones and went straight to cellular)
One thing we know about ICE cars is they can be produced cheaply (think moped, not sedan) and there's an endless supply of used copies.
So EV's are not that far behind conventional cars, so the higher energy density of gasoline makes less and less of a difference... especially for commuters since they can refuel at home instead of seeking out a gas station, so they only need enough range to get to work and back (plus a cushion for detours and errands). Our commuter car hasn't made it more than 100 miles from home in its 5 year lifetime.
http://www.latimes.com/business/autos/la-fi-hy-bolt-ev-drive...
Car and Driver got 238 miles with range to spare:
http://blog.caranddriver.com/how-i-drove-238-miles-in-the-ch...
Leading image from the article article taken in Monterrey neither foggy nor cool looking, instead appears as what would pass for summer in many parts of Europe and Canada.
If you don't believe they saw fog, the video included with the article shows the fog when he's crossing Bixby Bridge, about 30 minutes south of Monterey - skip to the 30 second mark.
Whether the mileage is 240, 200, or 180, that's still more than enough for most people to commute multiple days. Around 70% of US drivers have a one way commute of 15 miles or less.
http://www.freep.com/story/money/cars/mark-phelan/2016/12/17...
Great car btw. After all incentives and dealer rebates you can get one for ~21k. Has 50 miles of electric range and it's backup generator gets 42 mpg. And unlike the i3 rex it can travel at full speed on gas.
A Volt's battery is less than 20 kWh, and it has to last several hours, so it probably consumes around 5 kW.
Now take the phone's 5W a base; Even adding 10W to charge two devices, 10W for the bigger display, and 20W for the speakers, I doubt that electronics and in-car entertainment consumes more than 2-3% (150W) of the overall energy needed by the car.
Air conditioning is much more expensive, and the effect on ICE fuel usage is there but practically impossible to measure.
Taking car rides in my buddy's Volt will only get us from SF to Mountain View, and then it will switch to using gasoline.
How you accelerate/brake/etc, city vs. highway driving, and following distance from other cars ("drafting") can really affect the range...
One charges in 5 minutes, the other in a night or so.
> So EV's are not that far behind conventional cars, so the higher energy density of gasoline makes less and less of a difference...
I've been told that filling a petrol tank means transferring energy at a rate of about 20MW. This is where it makes a huge difference.
> especially for commuters since they can refuel at home
This may be true for US suburbia. In Europe a lot more people live in flats and park somewhere in the street. Unless we install power sockets in every streetlight, charging remains an unsolved problem for considerable swaths of the population (driving to a charging station is prohibitive -- I don't want to spend an hour+ just passing time).
EV owners often report that charging is more convenient, because you wake up with a full charge every morning. Plugging in to a charging point takes just a few seconds. A rapid charge will get you to 80% capacity in 30 minutes with most cars, but overnight charging allows you to take advantage of cheaper off-peak electricity.
>Unless we install power sockets in every streetlight
Lamp posts with built-in EV charge points are commercially available. A stand-alone charging point takes up no more space than a parking meter. If there's space to park a car, there's space to fit a charge point. Charging is a solved problem, it just requires investment.
https://www.zap-map.com/lamp-post-ev-charge-points-launched-...
Well, this plug-in hybrid owner disagrees. I find it very tedious to have to fiddle with the cable twice on every drive.
>> Unless we install power sockets in every streetlight
> Lamp posts with built-in EV charge points are commercially available. A stand-alone charging point takes up no more space than a parking meter. If there's space to park a car, there's space to fit a charge point. Charging is a solved problem, it just requires investment.
True, which is why I mentioned lampposts. But they need to be absolutely ubiquitous. "Some" lampposts don't cut it -- charging needs to be possible literally everywhere, or there will be perpetual fights over the coveted charging parking spots. In my city the curbs are completely full of parked cars at night -- if they all are electric, there'll be a spider web of charging cables. (Also, the charging port on my car is actually on the street side of the car :'-( ).
Depending on your commute. And the weather -- cold weather essentially halves my range.
Also you need to be more careful with your charge. Because if you run out at an inconvenient time, you're stuck charging for at least 30 minutes -- if a reachable charging station is not occupied.
My BIL was recently stuck in Zürich for a few hours, waiting for a charging station to become available for his Tesla so he could drive home.
Don't get me wrong -- I'd love to have an EV. And I really enjoy my hybrid. My next car will definitely also have electric drive.
But the fact is that dinosaur juice is just far, far more convenient and practical. Certainly now, but probably even in a hypothetical future with vastly improved charging infrastructure.
20% is still nothing to scoff at, but probably acceptable.
That seems the likely solution. Here's a map of points in the UK, many are simply a post next to the street: https://www.zap-map.com/live/
*edit:
Okay found it myself through realizing that these two are related.
Internal Combustion Engine = ICE
Electric Vehicle = EV
These are not common terms, though. And googling something that looks to google like "icecream" is hard. Please keep that in mind when using abbreviations.
Note: cargo ships don't use gasoline.
Of course such material doesn't exist etc
If we take the US, which consumes 21% of all petroleum, to understand oil usage pattern, we can see that 47% of US consumption is from petrol (gasoline). Second is Distillate fuel (diesel and heating oil), which accounts for 21%; this is used for industrial machines and heavy motor vehicles, trains, boats etc (diesel) and for industrial heating (heating oil) [1].
These two accounts for the vast majority of consumption (47 +21 = 68%).
The percentage used by transport sector has been increasing [2] over the years:
2013 63.8
2004 57.7
1973 45.4
Source: [1] https://www.eia.gov/energyexplained/index.cfm?page=oil_use [2] https://people.hofstra.edu/geotrans/eng/ch8en/conc8en/oecdoi...
About 6% each aviation and shipping.
About 8% plastics and manufacturing, plus more to non-energy uses.
Some generation, residential, and commercial use (much of it heating).
About half to all road transport (1865 Mtoe of 3744 Mtoe). I belive that's about 2:1 private autos vs. lorries.
Oil as chemical feedstocks is fairly substitutable -- an alternative hydrocarbon source, or carbon from, say, limestone, might substitute. Oil as long-distance transport fuel, most especially in aviation, not so much. Shipping once moved by wind, and might again. Overland electrically-sourced rail and possibly trucks might work.
I've got my doubts on the scalability of battery-operated vehicles, though progress to date has been fairly impressive.
Rocketry is another hard-to-substitute option. RP-1 is highly-refined kerosene, and by volume, your best bet. (Hydrogen packs a bigger punch by weight, but requires far larger tanks and cryogenics.) Solid rocket motors tend toward hydrocarbon sources. SpaceX relies on RP-1.
http://www.iea.org/sankey/#?c=World&s=Final consumption
Limestone offers that.
I'm not particularly versed in what the chemistry would look like, but if the interest is in, say, providing carbon to coking processes (allowing a non-energy carbon source to be combined with, say, direct solar thermal or electrically-provided heat), which accounts for about 15% of all present coal usage, then you're onto something.
I'm aware that limestone was considered for Fischer-Tropsch fuel synthesis based on nuclear-generated electricity, at Brookhaven National Labs in the 1960s (Meyer Steinberg, I believe, I've written on this and documented much of the literature at https://reddit.com/r/dredmorbius).
For plastics, etc., the situation's largely similar.
I suspect limestone, based on fossilised shellfish, is more abundant than coal, based on fossilised plant matter, given that conditions for limestone formation are probably easier to come by. For non-energy use, this might be a viable long-term option.
And, yes, burning limestone-originated carbon, in the synfuel instance, would be similarly problematic as burning coal is in terms of increasing atmospheric and oceanic CO2 (and carbonate/bicarbonate) levels. I'm mentioning the research interest, not endorsing it. More recent research along those lines looks at carbon recovery from seawater, or possibly atmospheric carbon, though the latter is vastly more energy intensive.
Actually, much worse: 46 MJ/kg for kero, 19.6 MJ/kg for methanol.
Presumably liquefied. 53.6 MJ/kg at your link.
Too much blood in my caffeine system.
Worse by volume, even liquified: 22.2 KJ/l vs. 37.4 KJ/l kero. Though the mass savings should trade that off some as well.
https://space.stackexchange.com/questions/3161/why-is-spacex...
2004 technical paper out of Germany:
No, sorry.
People have been predicted 'peak oil' and 'peak demand' since the 1970's.
Even a large number of Tesla's wont change that.
You do realize that there are a few billion 'carless' people in the world who are soon going to become 'cared'?
And they live in places that won't care about CO2, either from a policy or populist perspective?
And that there are a million other uses for oil other than family transportation?
The most salient issues in Aramco's valuation are:
1) Regime volatility: taxes etc. - not only will they change, they could change a lot.
2) Production and price volatility: a lot of geopolitical things go into how much they product, and there are massive shifts in prices over time. Booms and busts - not like most products (think Windows OS, or cars - they don't change that much in price)
3) Horizon: we're having to predict so far out into the future, there's considerable volatility just in that.
4) Cost of Capital leverage volatility: in a world of low interest rates, small changes in cost of capital tend to be amplified. Going from 5% to 10% is similar to 1% to 2%. Since we're in an era of very low interest rates, everything gets magnified and ballooned up.
I actually don't believe that alternative forms of energy production or transportation will make a dent in any of it.
There's so many ways to use Oil, that any drop in price introduces those mechanisms and it ends up becoming valuable again.
Then the world realized that oil demand will peak before oil production does. It's still hard to predict exactly when this will happen, but it's very different from peak production. Peak oil relied on us not finding new reserves and technology not improving. Peak oil demand on the other hand is based on technology continuing to improve so that the cost of generating and storing electricity will shift a lot of demand away from oil. I think this second prediction is a lot more likely than the first, and it's the reason I never worried about peak oil in the first place. People are really good at coming up with new technologies and lowering the cost of alternative energy sources. So I never bought into the doom and gloom stories of what would happen when we run out of oil.
http://www.globalpetrolprices.com/articles/39/
That's a worldwide figure. US oil consumption is even more concentrated on transportation.
I thought they were already pretty Sheikhy.
https://qz.com/901357/selfies-are-great-but-smartphones-have...
Vaclav Smil, Energy in World History
http://www.worldcat.org/title/energy-in-world-history/oclc/4...
Smil's Energy Transitions addresses switching between primary sources of energy:
http://www.worldcat.org/title/energy-transitions-history-req...
Manfred Weissenbacher, Sources of Power, in two volumes:
http://www.worldcat.org/title/before-oil-the-ages-of-foragin...
http://www.worldcat.org/title/oil-age-and-beyond/oclc/837625...
Limits to Growth is the old classic:
http://www.worldcat.org/title/limits-to-growth/oclc/70551520...
The 30 year update:
http://www.worldcat.org/title/limits-to-growth-the-30-year-u...
For a view of the political and social realities of addressing limits, I can't recommend William Ophuls, Ecology and the Politics of Scarcity highly enough.
http://www.worldcat.org/title/ecology-and-the-politics-of-sc...
Joseph Tainter, The Collapse of Complex Societies, spells out the more general dynamic.
http://www.worldcat.org/title/collapse-of-complex-societies/...
Oil, for example, has been utilised since prehistoric times, around the world.
The Chinese had massive gasworks, and in fact pioneered the drilling methods utilised by Colonel Drake in Titusville, PA. They'd achieved depths of 1300 meters using little more than bamboo and some wrought iron.
Drake had iron pipe and steam power for his drilling and pumping. Titusville and the Pennsylvania oil boom required a massive transportation infrastructure -- barrels on mulecart only got you so far. By the mid-1867s, railcars not much different from today's DOT-111 were in use, as well as steel pipelines.
The thing is that steam engines, railroads, tank cars, and steel, all themselves require energy, mostly in the form of coal for transport, refining, and smelting iron and steel. The Bessemer furnace (1856) produced the first high-quality metalurgical steel -- earlier iron was hard, but brittle, and construction based on it (rails, boilers, pistons) had a strong tendency to go their separate ways.
What's simply staggering, to me, is how quickly what we consider to be "modernity" emerged with the increased use of coal, oil, and gas. By the 1880s, most of the fundamentals of the modern world were here: reciprocating engines, the first turbines, skyscrapers, the first automobiles, electric lights and motors, basic coal-tar (and early petroleum) chemistry, and the beginnings of telecommunications and information technology (telegraph, telephone, punch card tabulators). There's an exceptionally strong argument that the modern world was invented between 1875 and 1925 -- there are a small handful of exceptions (lasers, nuclear fission, television, transistors (though vacuum tube valves pressaged them), MRIs, and gas turbines). Pretty much anything else you can conceive of existed, in at least rudimentary form.
You can spend your energies being insulted, or dig into a set of curated works which spell this out. Of the books, I'd strongly recommend Smil's "History" and Ophul's "Scarcity" as getting to the heart of the argument. Smil in particular makes the "approaches a limit" argument in repeated semi-log plots of energy usage growth (and efficiency) throughout his book.
Robert Gordon's The Rise and Fall of American Growth combines exceptionally good history with middling-to-bad economics to cover the US experience, 1870 - 2015, which he divides into three roughly 50-year spans. I recommend that book highly for the history as well (though somewhat less so for economics).
Even 'primitive' information technologies like complex language, paper, and the printing press might have played as large a role as energy in history, if not more so.
We can argue that scientific knowledge and its spread is the principal key to industrialization. China clearly had sufficient energy sources to invent the modern world; but Europe had the information and institutions to enable it first.
Energy will continue to be important but its commodity nature and the rise of renewables mean that it is not the most crucial edge that leading nations can use to outmatch one another.
China did invent the modern world (mostly), by the way. They just decided not to go the full way, though for reasons not entirely clear.
https://en.m.wikipedia.org/wiki/Science_and_Civilisation_in_...
Simon Winchester's biography of that epic work's creator, Joseph Needham, is highly engaging, and also recommended. It's a lighter read than most the other works I've recommended so far:
https://www.worldcat.org/title/man-who-loved-china-joseph-ne...
If I may, I'd like to recommend a couple of books about the present and possible futures of human progress as well:
E.O. Wilson. Consilience. https://www.amazon.com/Consilience-Knowledge-Edward-Osborne-...
Nick Bostrom. Superintelligence: Paths, Dangers, Strategies. https://www.amazon.com/Superintelligence-Dangers-Strategies-...
The question of why China didn't take the leap to a fully technical civilisation is ... an interesting one. It's called "The Needham Question" and was essentially what Needham was trying to answer in producing Science and Civilisation. Responses remain ... unsatisfactory.
If you're interested in printing and media (a topic I've been exploring in some depth), there's the rate of growth of publishing in Europe. Buringh & van Zanden provide an account of European manuscripts and books from 600 - 1800:
Buringh, Eltjo; van Zanden, Jan Luiten (2009), "Charting the "Rise of the West": Manuscripts and Printed Books in Europe, A Long-Term Perspective from the Sixth through Eighteenth Centuries", The Journal of Economic History, 69 (2): 409–445, doi:10.1017/s0022050709000837
From memory, the count in 1400 was roughly 30,000 volumes in all of Europe. That's not titles, that's total instances of all books throughout the continent.
By 1500, roughly 200 million, by 1600, ~525m, and nearly 1 billion total books by 1800.
Books were still tremendously expensive in the late 18th century. I believe Wealth of Nations sold for about 5L per copy, which was about a quarter of a labourer's annual wage.
Four factors had a huge impact in the 19th century:
1. Iron-framed presses. Sturdier and higher-output than a wood press.
2. Cheap pulp paper. I believe this came online in the 1830s.
3. Steam-powered presses. Output increased from on the order of 120 impressions/hour to thousands, then 10,000 by mid-century.
4. Literacy. Books do little good if you cannot read. Increased industrial work had created a demand for functional literacy and universal education amongst the masses. Europe's literacy rates rose from ~25% to 90%+ over the 19th century.
The relationship of technology to capability and/or science is ... interesting. Science doesn't always lead technology, and quite often follows it. Thermodynamics is a key example -- it was born of steam engines, and not the other way 'round. (Yes, there are counterexamples.)
There's also the early plateau of a great many inventions and innovations: automobile innovation hit a peak in the 1920s (measured by patents, as well as rate-of-performance or -efficiency metrics), aircraft only shortly after. The DC-3 was first produced in 1935 and remains in active service. Robert J. Gordon (Rise and Fall of American Growth) refers to it as "the most perfect aircraft ever built".
The development of fossil fuel resources required a bootstrapping process, and as with most such processes, a correct sequencing. Coal begat pumps begat steam pumps begat iron begat railroads begat telegraph begat Bessemer steel and dynamos begat electric motors begat oil drills begat tank cars begat pipelines begat internal combustion engines begat steam turbines begat gas turbines.... (Somewhat out of sequence, though you get the general drift.)
The vast majority of all power generation (electrical or traction) still comes from the Otto 4-cycle, Diesel, Parsons-derived steam turbine, or Curtis-derived gas turbine. All of these are 19th century technologies. (Charles Curtis's gas turbine sneaks in just under the wire: 1899.)
There's more than just fuel-based engines, to technology, mind. But the "unlimited potential" of Moore's Law exponentiating capabilities are limited to a small subset of mechanisms.
I've been trying to construct an ontology of technological mechanisms, earlier work linked below lists 7 elements, I'm now up to nine:
1. Fuels and fuel-based systems.
2. Power transfer and transformation. Shafts, levers, wheels, belts, electricity, magnetism, ...
3. Materials: capabilities enabled by virtue of material properties, and constrained by their limits and abundance.
4. Systemic (scientific) knowledge.
5. Process (technical) knowledge.
6. Organisation: Management of both human and non-human systems: governance, military, religion, law, business, finance, and cybernetics.
7. Network and dendritic structures. Comms, transport, trade, information, and electronic networks.
8. Information: sensing, measurement, processing, storing, and transmitting, through natural or augmented means.
9. "Hygiene". I'm still looking for a good word, but essentially, side-effect, unintended consequence, and negative-outcomes management. Pollution, sink exhaustion, systemic disruption, "bite-back".
I'm actively soliciting suggestions or criticisms.
I'm familiar with Wilson (love his work) and Bostrom (somewhat less enchanted).
https://ello.co/dredmorbius/post/klsjjjzzl9plqxz-ms8nww
https://www.reddit.com/r/dredmorbius/comments/5h6fgg/seeking...
My hypothesis: A lack of inexpensive and widely accessible books before the 19th century slowed down China's scientific and technological progress substantially. (Other cultural and governance factors undoubtedly played a role as well.)
By the way, I am not sure if we can say China did invent the modern world. Most of the scientific methods and mindset we inherit today largely evolved and took a mature form in Europe. Without which, most advanced technologies cannot be built upon.
Your 9-factor framework appears well thought out. Any plan to publish its details in full?
I would add Biological-medical systems which allows us to harness the nature of other living beings (taming, breeding, etc.), mitigate their harms (pesticides, antibiotics, etc), and deeply alter them and ourselves (genetic engineering, CRISPR, etc.) [2].
[1] https://en.wikipedia.org/wiki/History_of_printing_in_East_As...
[2] http://nautil.us/issue/18/genius/super_intelligent-humans-ar...
I'm still getting up to speed on history, but a big factor was an, IIRC, 14th or 15th century decision to turn inward. For various reasons, China was governed as an integral unit, unlike Europe which was divided amongst many autonomous governmental units -- don't like the (political) weather? Move 20 (or 200) miles. Happened frequently, and was relatively easily done due to ample coastlines and river systems (water was the air and highway network of the day). So right about the same time China was shutting down its invention engine, Europe was firing up.
Francis Bacon lists the compass, printing press, and gunpowder as the three inventions of modernity. All three came from China.
And, if you want to apply my ontology, the compass is information and sensing (magnetic north). Along with time measurement, it made for vastly improved navigation -- not so much a value add as a loss-minimisation -- England launched a bounty for an accurate shipboard clock after a fleet sailed onto the rocks -- the US repeated that feat in the twentieth century off the coast of Santa Barbara in steamships moving by dead reckoning through fog.... Printing is information storage and distribution. And gunpowder is something of a mix of fuel and power transmission. Range weapons offer the advantage to hunters, or warriors, of putting yourself out of range (or reach) of your quarry (or enemy's weapons). Risk mitigation.
China's approach to a number of areas is ... distinctly non-western. Philosophy, science, engineering, and moral philosophy or social sciences, are all distinctly different from the West. Again, I'm not as versed in this as I'd like to be, but the distinctions I've seen so far are pretty fascinating. And I'll definitely give you that the western traditions and philosophy of science appear indigenous. Francis Bacon, his earlier near-namesake Roger, Isaac Newton, Darwin, Linnaeus, Lyell, Faraday, and others, turned Western science and traditions differently.
I'm trying to sort out how to structure and describe the ontology. I've been collecting examples, looking for alternatives (or precursors -- none so far, I may have finally had an original idea), holes, etc.
Your biological-medical area is one I'd classify generally under "process knowledge". See Needham's classification (the Wikipedia article spells it out) for his view, I've got another encyclopedia I'm planning to raid for a western view -- that's on my worklist for synthesis and assimilation.
Genetic engineering is under information:
Information: Sensing (natural and artificial senses), language, speech, writing, maths, logic, formal logic, algorithmic processing, programming, genetic engineering, AI.
The techniques of, say, building and operating printing presses, telegraphs, telephones, radio, TV, computers, genetic analysis, etc., are under process knowledge. That's the physical element of information as opposed to the logical and informational component.
________________________________
Notes:
1. And the linotype process actually involved three generations of copying just to get to the printing plate, a fourth before the final published article was complete: matrix, cast into a type line "slug" which was set into the page form, to create a matte, which then created the actual print plate which impressed the final paper.
There's an excellent documentary on Linotype typesetting here: https://m.youtube.com/watch?v=6wHiddZOfa8
And if you're interested in the history of information, I suggest The History of Information, which is mind-bogglingly good (it's run by a long-time antiquarian bookseller). Warning: time-sink.
Thanks for the last link. It's very interesting. I wish they would include biological-genetic information that predates hominids as well.
For biological / genetic information, you might find David Christian's Big Science perspective of interest, though he doesn't go too far into detail on that. I'm watching (well, listening to) his lecture series (posted at the Dreddit, as I call the subreddit, also "The Lair"...), which looks into a lot of this.
You'll probably also find the work out of the Santa Fe Institute fascinating, as I have. http://www.santafe.edu I haven't looked into their work on genetics, excessivly, though I think John Holland touched on that in part, also Geoffrey West. There's W. Brian Arthur (economics and innovation), J. Doyne Farmer (innovation), David Krakauer (intelligence), Sander van der Leeuw (cognition and intelligence expressed through cultural complexity), and more.
On the 20th century industrialisation: I still think you can trace virtually all of that to the 1880s.
Automobiles required metalurgy (frames, chassis, body), fuel (petroleum => petrol / diesel), standardisation (a form of organisation, and hugely underappreciated -- interchangeable parts is a massive win), mechanised assembly (a worker with a 40 HP power allocation is vastly more effective than one without), and a prime mover.
Airplanes happened virtually at the same time as automobiles (1901: Model T, 1906, Wright Flyer), and for the same reasons: high power-to-weight ration petrol-fired engines. It took another few years to figure out which end was forwards (France pioneered what's essentially the modern wings-forward, empennage-aft design). The next problem was construction materials. Odd factoid: Boeing originated in Seattle for access to aircraft buiding materials. No, not cheap aviation aluminium from hydropower plants (that came later), but spruce wood. Light and strong.
Another line of development was plastics -- or essentially, synthetic polymers. That again started in the 1880s / 90s (Bakelite), but the big decade was the 1930s (coincident with major oil finds), where most of our modern plastics come from (PVC, ethelyne, nylon, etc.). Which suggests another set of progression for developments for new materials:
Use it materially (construction, missiles, sealant) => burn it => do chemistry with it. That seems particularly the case with fuel-type materials: wood, coal, oil, gas, and arguably, nuclear fissibles.
Electricity as with engine-driven shaft power simply made a whole slew of things possible. Much of it was (and is) mechanical energy delivery, though electricity also provided light, heat, and signalling capabilities (telegraph, telephone, radio, TV, computers). Which suggests another mode of development (this one just occurred ... and is why I like talking things out).
Another area of development comes from sensors and controls (two categories which play into one another). Metallurgy again is a field of application. Puddling furnaces became steal smelters (Bessemer process), became blast and oxygen furnaces. That required both bulk gaseous oxygen and very find temperature controls, possible through improved monitoring of the melt and understanding of blackbody radiation. And improved metalurgy made for much finer-precision and higher-quality products, particularly high-stress components of reciprocating and turbine engines. Modern aircraft turbine blades are grown from single-crystal tungsten elements.
So yes, improved technology buys you something. But ... only so much. Jet aircraft are faster but only recently more efficient than 1950s-era prop-driven aircraft. Heavy-lifting craft still favour props in many cases.
Or as I put the question a ways back: the Saturn V flight control computers formed an interstage ring above, if I recall, the third stage section. The Launch Vehicle Digital Computer (not quite what I had in mind) runs at approximately one one-millionth the speed of present processors.
Question is: what increased efficiencies other than raw weight savings would swapping out those electronics with modern equipment offer you? How much further could the Saturn V have gone, or how much less fuel could it have used, for a millionfold increase in compute power? And no, I'm not considering a redesign of the craft itself (though a comparison with, say, the Falcon 9 Heavy or ITS, fully greenfield modern LVs, might be interesting), but only what additional compute guidance offers an existing design.
The history with automobiles, aircraft, shipping, and other fuel-powered applications suggests limits to high-end efficiencies. Or you could look at, say, weather forecasting, where a similar millionfold increase in compute power (plus much better data acquisition through satellite and ground stations) has ... roughly doubled useful forecasting look-ahead.
Some problems are just hard.
And back to the 20th century explosion: ICEs, steam turbines, gas turbines, and electric motors (and light) seem to have had the biggest effects. China stopped short of these, for whatever reasons. If there's a set of linchpin innovations, I'd look strongly to them.
Thinking out loud: possibly also Haber-Bosch for lifting food-production limits, though that largely didn't kick in until the 1950s and 1960s (see elsewhere in this thread). But China had a fundamental provisioning problem, highly apparent in what Adam Smith had to say about the country in the 18th century.
https://en.m.wikipedia.org/wiki/Saturn_Launch_Vehicle_Digita...
Obligatory:
https://www.youtube.com/watch?v=mtcaIA9SU7o
Relevant portion is 0 - 1:20.
What has mattered more? The only reason oil is valuable is because it powers our technology. The contribution of agriculture to global GDP is about 4%. Yes you can't eat a smartphone but absolutely anybody sound in mind and body can grow food. Not so many can design smartphones. And they do matter[0].
[0] https://qz.com/901357/selfies-are-great-but-smartphones-have...
Perhaps you only know tech oligarchs. But if you look at the list of billionaires, you find also mining oligarchs and fossil fuel oligarchs. So much for the argument that raw materials do not matter...
Physicists invented nuclear racketeering, which made them celebrities in the 1940s and 1950s. We live in the age of the MBA, not in the age of the scientist. That golden age is gone, unfortunately.
Take all that away and you're Zimbabwe, with 0.3 tonnes.
Humans already command or control some 25-40% of all primary plant production (NPP, or the photosynthetic ceiling), much of that made possible through modern mechanised architecture.
In the works already mentioned (Smil, Weissenbacher), the immense increases in ag productivity through such advances as assisted irrigation, mechanised plows, disks, seed drills, fertiliser, harvesters, etc., etc., are addressed in detail.
GDP, and economic prices generally, are exceptionally poor measures of net contribution and value. (Or of true real costs.)
Northwestern University economist Joel Mokyr, otherwise quite a technological optimist, discusses the failure of GDP to capture the true impacts of, say, antibiotics or vaccines. Their price-based contributions to GDP are de minimus, but their impacts on overall well-being are tremendous.
http://www.nationmaster.com/country-info/stats/Agriculture/C...
And if the industriousness does not add enough value to the raw materials, then the financial return from the industriousness will not exceed that from the raw materials alone.
Most new ventures rely entirely on simple trading, profiting (subtracting wealth) without adding any value.
Other than trading the raw materials themselves, these ventures could not thrive unless someone else already had added some value to some raw materals so there would be someone other than commodity owners to sell to.
Plus if a raw material can not be commoditized, there will not be enough to go around.
As valuable commodities go, fuels by definition have always been cheap enough to burn, the value lies with the enormous quantity in essential commerce.
Like uber?
When I think about it.
Is the culture there linked to the investors?
Just food for thought.
I've heard government jobs in Saudi Arabia involve coming into the office maybe once a month.[0]
I'm not sure how representative that anecdote is, and I'm not sure if that's standard in Aramco too or not. Even if that's primarily just a factor of the public sector, I imagine it'd make it hard to compete for high quality labor in that ecosystem.
A large company sitting on abundant natural resources could develop lots of inefficient habits... has anyone written about management a/o culture at Aramco?
[0] http://www.npr.org/2016/02/11/466457128/saudi-arabia-turns-t...
Government jobs, on the other hand, are 100% Saudis and function essentially as a welfare/patronage system.
There are government-paid jobs in the US and other countries that aren't very far off from that.
This is correct but I think that it understates the actual risk. Even in the absence of sustained coordinated action against anthropogenic CO2 emissions, I find it hard to believe that surface transportation is going to remain dominated by liquid fuels for that long. An EV can go a lot further on a dollar's worth of electricity than an internal combustion vehicle can go on a dollar's worth of liquid fuel. That's even without any imputed price on CO2 emissions. Right now cheap electrical "fuel" use is hindered by the high up-front cost of vehicle batteries, but in 15 years, let alone 50? Time is not on Aramco's side.
I'd believe that Aramco can remain a profitable business even a century from now by focusing on non-fuel chemical products from oil. But oil as a commodity isn't going to maintain its outsized importance in world trade after demand for oil-as-fuel peaks.
It's tempting to believe that all problems are soluble, but it's totally possible for there to be a problem, like "cheap, dense, durable energy storage" that ends up being more than humans are capable of solving.
I don't know if you need a huge increase in capacity/kg - present Telsas work ok but are expensive. I'd be surprised if costs don't fall considerably. As to falls vs similar tech products I'm not sure which tech products you'd compare them to. They'll probably fall in price slower than memory chips and faster than railway lines for example.
But in any case, batteries are good enough today.
On the capacity front, I think your caution is very well founded. Since their commercial release 25 years ago, lithium ion batteries have only increased in energy density by like 2.5x. The vast improvement in battery life of electronics has come from the electronics, not from the batteries. And lithium ion is already near (within an order of magnitude) of its ultimate theoretical potential. Future progress here is going to get harder and harder. No battery expert I know expects future progress to be as fast as past progress.
However, on the cost front, I think there's less reason to be pessimistic. Here the limit is more economics, and less physics. As the scale of production has risen, costs have fallen substantially over the past couple decades. And over the next few years, world lithium ion production is set to triple again with the Gigafactory and others coming online. How much cost savings this brings is uncertain, but there's no theoretical reason that greater automation and scale won't continue to push costs down.
tl;dr: Non-chemists are too optimistic about technical progress in batteries. Future progress will almost certainly be slower. But there are no physical limits preventing prices from continuing to drop with experience and scale.
Gasoline motor fuel accounts for somewhat less than half of global petroleum consumption.
If you could wave a magic wand and eliminate gasoline demand tomorrow, the oil business would suffer a catastrophic adjustment/contraction, yes. But it would not go away, it would still be huge and powerful and rich and important. There are a lot of applications where there is no viable alternative yet, and no viable alternative on the horizon.
Here's a perverse idea: falling oil demand and prices due to vehicular electrification could make petroleum an attractive fuel for electricity generating plants. Ugh!
The current house and senate have an allergic reaction anytime infrastructure investment is mentioned, so I don't really see a solution to the problem arising anytime soon. I would imagine it will boil down to "oh, we just have to stop regulating the power companies so they can afford to upgrade" - at which point you'll find that dollar of electricity gets you about 1/100th the energy of that dollar of gasoline.
Conveniently, that's when commuter vehicles are most likely to be parked at home. That's also when local distribution circuits are traditionally operating well below capacity, so there won't initially need to be any distribution capacity upgrades to support night time vehicle charging.
So if oil prices decline, Saudi Arabia will be one of the last profitable producers.
http://graphics.wsj.com/oil-barrel-breakdown/
https://knoema.com/rqaebad/cost-of-producing-a-barrel-of-cru...
You think it hasn't peaked already? I mean the last few decades we saw another boom with some second world economies getting motorized, but that's done now. If we are not behind peak already we are so close that it's irrelevant, I'd say.
Very specifically, whenever the Saudi monarchy falls, Saudi Aramco is likely to be worth literally nothing, as the oil reserves are seized by whatever new government comes into power.
Even without the risk of revolution, the fact that there's currently no real difference between the Saudi government and Saudi Aramco opens a lot of ways that current "profits" can disappear fairly quickly.
Yes? I mean, unless they're planning to run a pyramid scheme, by selling off a portion of Aramco they will be reducing the value of their stake in Aramco. It's not like a minority stakeholder in Aramco is going to be able to push changes that would result in more value being created.
Things are about to get real for Saudi Arabia. The price of oil will probably never recover the point where their government budget will balance. The whole house of cards comes tumbling down if they piss off their populace by reducing subsidizes and/or introducing taxes.
And even after they implement widespread taxation, they won't have to worry much about "pissing off their populace". You wouldn't believe just how much they invest in surveillance, weaponry, and military training. Some of the top dogs have their own private armies - usually military contractors - in case of conflict within the monarchy itself. It's crazy stuff.
On top of that, citizens of Gulf countries are usually very trusting of their leaders for cultural reasons. It goes back to the bedouin way of life. As for non-citizens (i.e., expats), they usually keep their mouth shut to avoid ending up on the next flight back home.
The two reasons above are mainly why nothing happened in the Gulf during the Arab Spring. Bahrain was an exception: the motivation there was more sectarian than political. The Shia majority were not satisfied with the Sunni monarchy, and so they wanted to install Shia rulers in their place. It's rumored that Iran was heavily backing a coup attempt, which is why the Saudis were called in.
How does all square with being a publicly traded company?
At those tax rates, basically yes.
> How does all square with being a publicly traded company?
Investors must take into the account those problems and change how much they're willing to pay for Aramco accordingly.
If there were WW3 including total technological collapse, then Aramco will be amongst few ones that could still supply oil easily, as other sources in shallow depths are mostly depleted, hence unreachable with a more primitive technology. Then Saudis will be the only ones that could maintain a civilization somehow resembling ours.
maintain a civilization somehow resembling ours
Those two things are totally incompatible with each other. Saudi Arabia is basically sand with a bunch of oil wells scattered here and there. After any sort of technological collapse Saudi Arabia, within a few years, once again becomes a few handfuls of Bedouins wandering around on camels.
All the oil in the world won't do Saudi Arabia any good when the fancy equipment for pumping and refining oil needs repair, if the highly developed global supply chain is no longer available. Not to mention the absence of the 99% of everything else Saudi Arabia consumes that doesn't exist within its borders.
This problem isn't limited to Saudi Arabia. It exists everywhere. E.g. the 8 million people in NYC can't exist as they are without electricity. Sure the reservoirs upstate could provide water via gravity 150 years ago, but pretty much nothing else would work.
Saudi's downfall is going to be good for entire humanity. Saudi's oil money has fueled wahabism across the world with disastrous effects.
* The Spanish Empire (Spanish: Imperio español) was one of the largest empires in history. It reached the peak of its military, political and economic power under the Spanish Habsburgs,[2] through most of the 16th and 17th centuries, and its greatest territorial extent under the House of Bourbon in the 18th century, when it was the largest empire in the world. *
There were no eternal empires throughout the history and probably will never be. Current world dominating countries are still in infancy compared to some empires of the past. Spain was one of the world dominating powers for centuries and that counts for something.
Unless I'm missing a deeper point, for which I'll appreciate clarification.
---In 16th and 17th century Spain — its "golden age" — the windfall gain was gold and silver looted by the ton from Spanish colonies in the Western Hemisphere. This enabled Spain to survive without having to develop the skills, the sciences or the work ethic of other countries in Western Europe.
Spain could buy what it wanted from other nations with all the gold and silver taken from its colonies. As a Spaniard of that era proudly put it, "Everyone serves Spain and Spain serves no one."
What this meant in practical terms was that other countries developed the skills, the knowledge, the self-discipline and other forms of human capital that Spain did not have to develop, since it could receive the tangible products of this human capital from other countries.
But once the windfall gains from its colonies were gone, Spain became, and remained, one of the poorest countries in Western Europe. Worse, the disdainful attitudes toward productive work that developed during the centuries of Spain's "golden age" became a negative legacy to future generations, in both Spain itself and in its overseas offshoot societies in Latin America.
In Saudi Arabia today, the great windfall gain is its vast petroleum reserve. This has spawned both a fabulously wealthy ruling elite and a heavily subsidized general population in which many have become disdainful of work. The net result has been a work force in which foreigners literally outnumber Saudis.
Some welfare states' windfall gains have enabled a large segment of their own citizens to live in subsidized idleness while many jobs stigmatized as "menial" are taken over by foreigners. Often these initially poor foreigners rise up the economic scale, while the subsidized domestic poor fail to rise.
Do we really want more of that? -----
[1] https://www.creators.com/read/thomas-sowell/06/16/is-persona...
I must confess, I find your logic quite lacking in sense or purpose.
On the other hand, I can't see where I called the parent pseudo intellectual. You'd rather look that up as well.
Even with the normal oil plus tar sands, oil is only Canada's #2 export behind vehicles, 16% of exports. Canada has a well-diversified economy quite unlike Venezuela, Iraq and Saudi Arabia. Iran isn't terrible but oil is still 2/3rds of their exports.
Edit: to be clear, I am referring to written or drawn pornography depicting fictional minors engaged in sexual acts. Not photography or video of child abuse, or rape porn, or even bestiality (although I am against the lattermost item being illegal too).
If this is how you draw the line between free and not-free, I can only imagine that your definition of freedom is anarchy.
Then you're wrong. Drawn pornography that appears to show fictional characters who appear to be under the age of 18 is illegal, and there have been prosecutions under this law. Even such written material is illegal.
My definition of true freedom is anarchy (which is why I am an anarachist), but I accept that there is a different definition under the current liberal democracies of the world, and even by those standards, Canada is not free.
The 'real' issue of freedom in Canada is that it's basically the only country in the world wherein it's illegal to pay a doctor to help you. That's actually pretty crazy when you start to think about it.
Sucks for the doctors (< 1% of the population) but for patients nobody is stopping you from going to the US/Mexico/Thailand and paying for care there.
It's illegal to privstely pay all kinds of people providing public services to help you all ocer the world; Canada defining medicine as that kind of public service is atypical, but I don't see how it's "crazy".
Geez, here's a 10 year-old article about private clinics: http://www.theglobeandmail.com/news/national/private-health-...
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC80881/
My personal medical advice to get get some ice on that burn.
I don't really know what else to say. Most people value freedom, and that in my opinion ought to include the freedom to say things that are 'disgusting'.
Do you think it is right for someone to be imprisoned for it? I'm sure they care, and you would too if you were them.
No wonder they want to IPO!
I'm not aware of any impending sanctions by the UN against Saudi Arabia. I haven't even heard this suggested. What would these be for? Can you elaborate?
> A profitable IPO is meant to anchor a sovereign wealth fund that will, if things unfold as envisioned, generate enough investment income at home and abroad to dominate state revenue by 2030. Demand for oil will peak just before then, according to Royal Dutch Shell Plc projections, as alternative fuels and electric cars gain popularity, putting Middle East energy producers on shakier footing.
So, it sounds like they want to turn their oil reserves into cash before the price of oil begins to fall.
Of the rough thirds, the 1/3 that makes energy is mostly domesticly sourced, which is a good thing. We can ethically produce that as a backup to renewables (safety and reliability reasons).
The third that 'makes cars go' was majority foreign until the 90s. Fortunately we've turned that number around. Electric vehicles don't have the energy density of gas cars yet. If you don't live in the desert of California/NYC/etc, they're quite inconvenient. We need stronger magnets and denser batteries. We can drive innovation in this area by letting market forces act. Qe need to be careful about over regulation, as to not drive reverse progress. I'm very hopeful and happy for electric in this area to dominate.
The final third that goes to 'making things' can't be easily replaced ATM. Hydrocarbon feedstocks to make everything from medicine to lightweight carbon fiber are made from oil. We could possibly produce this domestically and at least be assured it's being done ethically and safely. This is the slowest area of innovation unfortunately, and if you're reading this, in your lifetime will likely not be replaced by a process that doesn't involve hydrocarbons. A breakthrough in this area would be sorting waste materials for recycling, or an electric power source so dense, reliable, and cheap we could capture co2 and turn it into hydrocarbons (maybe nuclear here?)
They seriously think it'll bring it more than Microsoft, Google, Apple, and Amazon combined?